Mobile Game Spending Expected To Hit $28 Billion In 2016

By William Usher 2014-06-18 14:31:40 discussion comments
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A new market research report from Juniper Research has revealed some somewhat interesting new data points about the expected spending reach for the mobile market in 2016.

GamesIndustry.biz managed to get a hold of some of the data from the premium report offered on the Juniper Research website, where it's revealed that they approximate mobile game spending to hit $28 billion by 2016.

As noted in the article...
“...total revenues from the mobile games market are expected to reach $28.9 billion by 2016, representing 38 percent growth from the $20.9 billion Juniper cites for 2014. Juniper stresses that "in an effort to maximize their apps' potential, developers are turning their focus on increasing user lifetime value."

That's very interesting, because it means that millions of gamers “passing by” free apps aren't really spending the way some companies might want. In fact, it was reported on back in August of last year by Erik Kain from Forbes that a large portion of mobile game revenue comes from small pools of male “whales” (a term that refers to a player who spends disproportionate amounts of money on a single game). Overall, though, the market data has suggested that, in America, females on average out-populate their male counterparts when it comes to app usage.

In this case, companies aren't concerned with the people who use the app, but the people who spend money on the app.

The article relating to Juniper's research points to companies wanting to focus more on tablet gaming since it offers better engagement and graphical capabilities. Remember, graphics do matter when it comes to selling a game.

As noted in the article...
“Rather than focusing intently on bulk acquisition of casual players, many developers and game companies are now looking harder at what can be done to get higher returns on each user that does come on board. To that end, many developers may want to target tablets more heavily than smartphones, as Juniper found that tablet users actually will spend more on in-game purchases”

Focusing more on tablets may or may not be a fruitless venture. Remember, a large quantity of developers left the mobile space because competition was high and user engagement was low.

When you're competing for eyes on your product from a casual consumer, you're only dealing with a third of an audience who is actually informed about the title, the rest are likely to find out about the game from friends, co-workers or because the game is trending on the charts. In short, not every can or will get lucky and garner random success like Rovio did with Angry Birds or Dong Nguyen did with Flappy Bird.

According to Juniper's data, it might seem likely that companies will want to focus-fire on the emerging mobile markets like Japan, since spending in that market is higher than mobile app spending in America, even though there are more American mobile users.

However, based on the available data, it would seem unlikely that Juniper's claim that mobile game spending will completely bury the Nintendo 3DS and Sony's handhelds in 2016 unless companies found a way to retain engagement and consistent spending from their audience(s). However, there doesn't seem to be a rhyme or method to actually capture the casual crowd that dominates the mobile space.
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